1026-00001 · Briarwood Family Office LLC · Side-Letter Negotiation

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CALDERWOOD & HARKNESS LLP Funds & Asset Management 425 Lexington Avenue New York, New York 10017

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT NOT FOR DISTRIBUTION BEYOND NAMED RECIPIENTS

MEMORANDUM

March 8, 2024

TO: Sandra M. Whitfield, General Counsel, Briarwood Family Office LLC Derek T. Calloway, Director of External Investments, Briarwood Family Office LLC

FROM: Theresa Kim, Senior Associate, Funds & Asset Management, Calderwood & Harkness LLP

CC: Pamela Cross, Partner, Funds & Asset Management, Calderwood & Harkness LLP

RE: Preparation Memorandum for Four-Party Conference Call — Side-Letter Negotiation, Meridian Peak Capital Partners Fund IV, L.P.

MATTER NO.: 1026-00001

This memorandum is a privileged and confidential attorney-client communication and constitutes attorney work product prepared in anticipation of litigation and/or in connection with the provision of legal advice. This document is intended solely for the use of the named recipients and should not be forwarded, copied, or disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. Any inadvertent disclosure does not constitute a waiver of any applicable privilege.

I. PURPOSE AND OVERVIEW

The purpose of this memorandum is to prepare Briarwood Family Office LLC ("BFO") and its representatives for the four-party conference call currently scheduled for Monday, March 11, 2024. The call will involve counsel and principals for both BFO and the general partner of Meridian Peak Capital Partners Fund IV, L.P. ("Fund IV" or the "Fund"), and is intended to discuss and attempt to resolve the remaining open points in the side-letter negotiation between BFO, on the one hand, and Fund IV and its general partner, Meridian Peak Capital Partners GP IV LLC (the "GP"), on the other.

By way of background, Calderwood & Harkness LLP ("C&H") delivered the second draft of the proposed side letter (the "Second Draft Side Letter") to Ashford Crane & Hewitt LLP ("Ashford Crane"), counsel to the GP, on March 7, 2024. That second draft was prepared in response to the GP's first markup of the initial draft side letter, which Ashford Crane circulated to C&H on March 4, 2024 (the "GP Markup"). The Second Draft Side Letter incorporated certain of the GP's proposed revisions where those revisions were consistent with BFO's investment policy and negotiation objectives, while maintaining BFO's core positions on several material provisions. As of the date of this memorandum, multiple provisions in the Second Draft Side Letter remain in brackets, reflecting areas of continued disagreement between the parties.

This memorandum is organized to serve as a comprehensive preparation guide for the call. Specifically, it:

• Identifies each open point that is expected to be discussed on the call;

• Summarizes the respective positions of BFO and the GP on each open point;

• Provides our recommended talking points and framing for each issue;

• Outlines fallback positions and negotiation parameters for BFO's consideration and pre-authorization; and

• Addresses call logistics, negotiation strategy, procedural reminders, and requested pre-call actions.

For ease of reference, this memorandum should be read in conjunction with the following documents, copies of which have been provided to BFO under separate cover:

1. Second Draft Side Letter, dated March 7, 2024 (delivered by C&H to Ashford Crane);

2. GP Markup of First Draft Side Letter, received March 4, 2024 (prepared by Ashford Crane);

3. BFO's initial side-letter term sheet, dated February 7, 2024 (prepared by Derek Calloway and reviewed by C&H);

4. Amended and Restated Limited Partnership Agreement of Meridian Peak Capital Partners Fund IV, L.P., dated December 20, 2023 (the "LPA"); and

5. C&H's excuse rights analysis memorandum, dated March 6, 2024 (internal attorney work product).

We note that the Second Draft Side Letter was prepared against the backdrop of BFO's proposed capital commitment of $75,000,000 to Fund IV, which represents approximately 5.0% of the Fund's target capitalization of $1,500,000,000. This commitment size, while meaningful, positions BFO below the Anchor Investor threshold discussed further in Section III.B below, and accordingly the terms available to BFO through the side letter and MFN process are of particular importance to ensuring that BFO's investment in Fund IV is appropriately structured.

II. CALL LOGISTICS

The details of the scheduled conference call are as follows:

Date: Monday, March 11, 2024

Time: To be confirmed. Owen Fischer (associate at C&H) is coordinating with Ashford Crane pursuant to a scheduling email dated March 6, 2024. We expect confirmation of the call time no later than close of business on Friday, March 8, 2024, and will circulate dial-in or video conference details promptly upon receipt.

Format: Telephone and/or video conference (platform to be confirmed with scheduling details).

Proposed Attendees:

Roles and Responsibilities on the Call: We propose that Pamela Cross take the lead on presenting and discussing the legal and structural points outlined in this memorandum, including the drafting of specific side-letter provisions, the interplay between the side letter and the LPA, and the market-standard analysis supporting BFO's positions. Sandra Whitfield and Derek Calloway should be prepared to address BFO's investment considerations, the commercial rationale for the terms BFO has requested, BFO's investment policy constraints (particularly with respect to the excuse categories), and any questions that the GP or its counsel may direct to BFO's principals regarding BFO's investment thesis for Fund IV. Theresa Kim will be available to address specific drafting points and to take notes for the post-call summary memorandum.

We would recommend that BFO's representatives avoid making binding commitments on the call without first consulting with C&H, particularly with respect to any proposals from the GP that deviate from the fallback parameters outlined in this memorandum.

III. AGENDA — OPEN POINTS FOR DISCUSSION

The following sections address each of the open points that we anticipate will be discussed on the March 11 call. We have organized these in order of anticipated significance, beginning with the two most material disputed provisions and concluding with the additional bracketed items that, while important, are more likely to be resolved through modest compromise.

A. Agenda Item 1: Excuse/Exclusion Rights Cap (Section 3 of Draft Side Letter)

Summary of the Issue

Section 3 of the Draft Side Letter provides BFO with excuse and exclusion rights with respect to four specified categories of investments. Specifically, BFO may elect to be excused from participating in any capital call or investment to the extent such capital call or investment relates to:

(a) cannabis-related assets, including direct or indirect investments in entities engaged in the cultivation, processing, distribution, or sale of cannabis or cannabis-derived products, regardless of the legality of such activities under applicable state law;

(b) gaming and casino properties, including investments in entities that derive a material portion of their revenue from gaming operations, casino facilities, or related hospitality assets;

(c) investments in or involving jurisdictions subject to comprehensive economic sanctions imposed by the United States, including sanctions administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury; and

(d) any investment that would cause BFO or any of its beneficial owners to be treated as holding "plan assets" within the meaning of Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the regulations promulgated thereunder by the U.S. Department of Labor.

The excuse right is exercisable by BFO within fifteen (15) business days of BFO's receipt of the applicable capital call notice or investment notice from the GP, consistent with the exercise period agreed to in the GP Markup. The parties have reached agreement on the four categories of excusable investments set forth above and on the exercise mechanics. There is no dispute as to the substance of the excuse categories or the procedural framework for exercising the excuse right.

The dispute between the parties centers on the aggregate cap on excused investments as a percentage of BFO's total capital commitment of $75,000,000. The aggregate cap is intended to limit the total dollar amount of capital calls from which BFO may be excused over the life of the Fund, and the parties' respective positions on this cap differ materially.

BFO's Position (as Stated in the Second Draft Side Letter)

BFO's Second Draft Side Letter provides for an aggregate excuse cap of 25% of BFO's total capital commitment, which equates to $18,750,000 (i.e., $75,000,000 × 25%). BFO's rationale for the 25% cap is grounded in the following considerations:

• BFO's investment policy, as adopted by the Hargrove family and administered by BFO's investment committee, strictly prohibits direct or indirect exposure to cannabis-related assets and gaming/casino properties. These prohibitions are not discretionary; they reflect the Hargrove family's longstanding values-based investment criteria and are binding on BFO's investment professionals when deploying family capital.

• A cap set at 15% (as proposed by the GP) may prove insufficient if Fund IV pursues multiple investments in the cannabis and gaming sectors, which are areas of growing activity in the private equity market. If BFO exhausts a 15% excuse cap, it would face the untenable choice of either (i) breaching its own investment policy by participating in excusable investments, or (ii) defaulting under the LPA by declining to fund capital calls in excess of the cap. Neither outcome is acceptable.

• BFO's excuse categories are narrowly tailored and limited to four specific investment types, each of which is driven by genuine regulatory, legal, or policy constraints. BFO has not sought a broad "opt-out" right or a general excuse provision; the categories are specific and well-defined.

GP's Position (as Stated in the GP Markup, March 4)

The GP's first markup of the initial draft side letter counter-proposed an aggregate excuse cap of 15% of BFO's total capital commitment, equating to $11,250,000 (i.e., $75,000,000 × 15%). The GP's stated rationale for the 15% cap includes the following:

• The GP asserts that higher excuse caps distort fund economics and create administrative complexity in connection with capital call management, overcall calculations, and the allocation of investment opportunities among limited partners.

• The GP represents that a 15% aggregate excuse cap is consistent with the terms of side letters negotiated with limited partners in the GP's prior funds, including Meridian Peak Capital Partners Fund I, L.P., Meridian Peak Capital Partners Fund II, L.P., and Meridian Peak Capital Partners Fund III, L.P. (collectively, "Funds I–III"). The GP has characterized the 15% cap as its "standard" excuse cap for institutional investors.

• The GP has expressed concern that a 25% cap, if granted to BFO, could establish a precedent that other limited partners may seek to invoke through their own MFN provisions, potentially resulting in a materially higher aggregate excuse cap across the Fund's investor base.

Recommended Talking Points for the Call

We recommend that Pamela Cross and Sandra Whitfield frame BFO's position on the excuse cap using the following talking points:

1. Narrow Tailoring of Excuse Categories. BFO should emphasize that its excuse categories are narrowly tailored and limited to four specific investment types. BFO is not seeking a generalized opt-out right or a broad discretionary excuse. Each of the four categories is driven by a genuine, identifiable constraint — two are driven by BFO's values-based investment policy (cannabis and gaming), one is driven by U.S. law and OFAC sanctions compliance (sanctioned jurisdictions), and one is driven by federal statutory requirements under ERISA (plan assets). The narrow scope of the excuse categories meaningfully reduces the likelihood that BFO will approach or exhaust the cap, which in turn should mitigate the GP's concerns about fund economics and administrative complexity.

2. ERISA Plan-Asset Excuse as Legal Necessity. BFO should argue that the ERISA plan-asset excuse is not a commercial preference but rather a legal necessity. To the extent BFO or any of its beneficial owners could be treated as holding "plan assets" as a result of a Fund IV investment, BFO could become subject to ERISA's prohibited transaction rules and fiduciary standards, with significant legal and financial consequences. The ERISA excuse protects both BFO and the Fund from inadvertent regulatory exposure. Given the legal (as opposed to commercial) nature of this excuse category, BFO's position is that the ERISA excuse should not count toward the aggregate cap at all, or at minimum should be treated differently from the policy-driven excuse categories. This argument supports a higher cap or, alternatively, a carve-out that preserves the effective cap for policy-driven excuses while removing the ERISA excuse from the cap calculation entirely.

3. De Minimis Impact on Fund Economics. BFO's $75,000,000 commitment represents approximately 5.0% of Fund IV's target capitalization of $1,500,000,000. Even at a 25% excuse cap, the maximum aggregate amount that BFO could excuse from capital calls would be $18,750,000, which represents approximately 1.25% of total targeted fund commitments. This is a modest figure in the context of a $1.5 billion fund, and the practical impact on fund-level economics, overcall mechanics, and investment allocation would be negligible.

4. Market Comparables. C&H's excuse rights analysis memorandum, dated March 6, 2024, surveyed excuse cap provisions in side letters across a sample of comparable private equity funds with target capitalizations in excess of $1.0 billion. That analysis indicates that aggregate excuse caps in the range of 20% to 30% of an investor's commitment are common for institutional investors with policy-driven excuse rights. A 15% cap, while not unprecedented, falls below the median for investors in BFO's commitment size range and with similarly tailored excuse categories. We recommend referencing this analysis on the call at an appropriate juncture, without disclosing the specific funds or LPs surveyed.

Fallback Position. BFO's authorized fallback positions on the excuse cap are as follows, in order of preference:

• Preferred Outcome: 25% aggregate cap on excused investments, as set forth in the Second Draft Side Letter.

• First Fallback: If the GP will not accept 25%, BFO is prepared to accept a 20% aggregate cap on excused investments ($75,000,000 × 20% = $15,000,000), provided that ERISA plan-asset excuses are excluded from the cap calculation. Under this formulation, the 20% cap would apply only to excuses exercised with respect to cannabis-related assets, gaming/casino properties, and investments in sanctioned jurisdictions. ERISA plan-asset excuses would be unlimited (or subject to a separate, higher cap). This compromise preserves BFO's core policy-driven excuse rights while acknowledging the GP's desire for a lower headline cap.

• Second Fallback / Hard Floor: If the GP rejects the ERISA carve-out from the cap, BFO's hard floor is a 20% aggregate cap inclusive of all four excuse categories. BFO should not agree to a cap below 20% without obtaining further authorization from BFO's investment committee.

• Do Not Go Below: Under no circumstances should BFO's representatives agree to an aggregate excuse cap below 20% of BFO's capital commitment on this call. If the GP's position remains at 15% and the parties cannot reach agreement, the item should be tabled for further discussion off-line, and C&H will consult with the investment committee regarding next steps.

B. Agenda Item 2: Most Favored Nation (MFN) — Anchor Investor Carve-Out Scope (Section 2 of Draft Side Letter)

Summary of the Issue

Section 2 of the Draft Side Letter contains BFO's most favored nation ("MFN") clause, which entitles BFO to elect to receive any economic or governance term granted by the GP (or the Fund) to any other limited partner that has committed $50,000,000 or more to Fund IV. The MFN clause is a standard investor protection provision and the parties have agreed on its core framework, including the $50,000,000 commitment threshold for MFN-eligible limited partners.

The MFN election mechanics, as currently drafted and substantially agreed, operate as follows:

• The GP is required to deliver to BFO a redacted summary of all material side-letter terms granted to other limited partners within fifteen (15) business days of the applicable closing at which BFO is admitted to the Fund (or, if BFO is admitted at the initial closing, within fifteen (15) business days of any subsequent closing at which additional side letters are entered into).

• BFO's election to adopt any additional terms identified in the MFN summary must be made within twenty (20) business days of BFO's receipt of the summary (the "MFN Election Period").

• The MFN is subject to the following agreed exclusions: (i) terms granted to limited partners committing $200,000,000 or more to the Fund (referred to as "Anchor Investors"); (ii) regulatory accommodations specifically tailored to ERISA plans, tax-exempt entities, or governmental plan investors, to the extent such accommodations address regulatory requirements unique to those investor types; and (iii) terms made available to GP affiliates or related persons.

The parties are in agreement on the MFN concept, the $50,000,000 threshold for MFN-eligible LPs, the $200,000,000 threshold for Anchor Investors, the MFN Election Period, and the exclusions for regulatory accommodations and GP affiliate terms. The dispute concerns the scope of the Anchor Investor carve-out — specifically, whether the carve-out applies only to economic terms or extends to all terms, including governance and information rights.

BFO's Position. BFO's position, as reflected in the Second Draft Side Letter, is that the $200,000,000 Anchor Investor threshold is acceptable. BFO does not object to the principle that limited partners committing significantly larger amounts to the Fund may receive differentiated treatment. However, BFO's position is that the Anchor Investor carve-out should apply only to economic terms — specifically, management fee reductions, carried interest modifications, co-investment fee arrangements, and similar economic concessions — and should not extend to governance or information rights.

BFO's concern is as follows: if the Anchor Investor carve-out is a blanket exclusion covering all terms (as the GP has proposed), then Anchor Investors could receive enhanced governance and transparency rights — such as LPAC seats, expanded consent rights, veto rights over certain fund actions, or enhanced reporting and information access — and those rights would be entirely excluded from the MFN. BFO would have no ability to elect to receive those same governance and transparency protections, regardless of BFO's own commitment size or the nature of the rights at issue.

BFO views governance and transparency rights as fundamentally different from economic concessions. Economic concessions (such as fee discounts) reflect the commercial bargain associated with a larger commitment and have a direct financial cost to the GP or the Fund. Governance and transparency rights, by contrast, promote fund accountability, investor oversight, and informed decision-making; they are not zero-sum and their extension to additional investors does not impose a comparable cost on the GP.

GP's Position (from the GP Markup)

The GP's first markup proposed that the Anchor Investor carve-out be a blanket exclusion — meaning that all terms granted to Anchor Investors, whether economic, governance-related, or informational in nature, would be excluded from the MFN. The GP's rationale for this position is that Anchor Investors' significantly larger commitments (in excess of $200,000,000, representing more than 13% of the Fund's target capitalization) justify differentiated treatment across all dimensions of the fund relationship, not solely with respect to economics. The GP has characterized this as consistent with its approach in Funds I–III and as necessary to attract and retain Anchor Investor commitments.

Recommended Talking Points for the Call

We recommend framing BFO's position on the MFN anchor carve-out as follows:

1. Acknowledge Economic Distinction. BFO should begin by acknowledging that fee-based economic concessions for Anchor Investors are market standard and that BFO does not seek to challenge the GP's ability to offer differentiated economics to limited partners committing $200 million or more. BFO understands and accepts that Anchor Investors may receive management fee reductions, carried interest modifications, co-investment fee waivers, and similar economic incentives that reflect their proportionally larger commitments to the Fund. This acknowledgment should establish that BFO's position is reasonable and targeted, rather than an attempt to undermine the Anchor Investor relationship.

2. Draw the Governance/Transparency Distinction. BFO should then clearly articulate the distinction between economic terms and governance/transparency terms. Governance and transparency rights — including LPAC observer or voting seats, expanded consent rights, enhanced reporting timelines, ESG reporting, portfolio-level data access, and similar provisions — serve a fundamentally different function than economic concessions. They promote fund accountability, enable informed investor decision-making, and support the oversight framework contemplated by the LPA. Importantly, the extension of governance and transparency rights to additional limited partners does not impose a material cost on the GP or dilute the value of those rights for Anchor Investors. These rights are not zero-sum: an LPAC observer seat for BFO does not diminish the value of an LPAC voting seat held by an Anchor Investor.

3. Market Data. C&H's internal MFN comparison matrix, prepared as an internal working paper dated February 5, 2024, analyzed MFN provisions across a sample of comparable private equity funds. That analysis indicates that approximately 60% of comparable fund side letters limit the Anchor Investor carve-out to economic terms only, while approximately 40% adopt a blanket carve-out covering all terms. The majority-market position supports BFO's proposed approach. We recommend referencing this data point on the call, without disclosing specific fund names or investor identities.

4. Proposed Compromise Language. BFO should propose the following compromise formulation for the Anchor Investor carve-out: the carve-out applies to "economic terms, including management fee reductions, carried interest modifications, and co-investment fee arrangements," while governance, reporting, and information rights granted to Anchor Investors remain subject to MFN election by qualifying limited partners (including BFO). This language preserves the GP's ability to offer differentiated economics while ensuring that governance and transparency protections flow through the MFN to all qualifying investors.

Fallback Position.

• Preferred Outcome: Anchor Investor carve-out limited to economic terms, with governance, reporting, and information rights remaining subject to MFN election.

• Fallback: If the GP insists on a blanket carve-out covering both economic and governance terms, BFO can accept the blanket carve-out provided that enhanced reporting rights — specifically, quarterly and annual financial reporting timelines, ESG reporting obligations, and portfolio-level data access — are expressly excluded from the carve-out regardless of the committing LP's commitment level. Under this formulation, BFO would concede on LPAC seats, consent rights, and other governance provisions, but would preserve its core transparency and reporting objectives through a targeted carve-out to the carve-out.

• This fallback preserves BFO's most important objectives (transparency and information access) while deferring to the GP on the distinction between economic and non-economic governance rights. We believe this is a defensible compromise that the GP may find acceptable, particularly if BFO demonstrates flexibility on other items during the call.

C. Agenda Item 3: Key Person Suspension Duration (Section 7 of Draft Side Letter)

Summary of the Issue

The Fund IV LPA contains standard key person provisions, set forth in Section 9.4 of the LPA, identifying Conrad J. Ellsworth (Founder and Managing Partner of Meridian Peak Capital Advisors LLC) and Priya Narayan (Partner and Chief Investment Officer of Meridian Peak Capital Advisors LLC) as the Fund's designated key persons. Under the LPA, a "Key Person Event" occurs if either Ellsworth or Narayan ceases to devote substantially all of his or her professional time and attention to the affairs of the Fund, subject to customary exceptions for temporary absences, illness, and similar circumstances. Upon the occurrence of a Key Person Event, the LPA provides for a fund-level suspension of the investment period, during which the GP may not make new investments (other than follow-on investments and commitments to fund existing obligations), pending a vote of the LPAC or the advisory committee on whether to reinstate the investment period.

In Section 7 of the Draft Side Letter, BFO sought an additional, investor-level key person protection that would operate in parallel with (and in addition to) the fund-level key person mechanism in the LPA. Specifically, BFO proposed that upon the departure of either Ellsworth or Narayan, there would be a suspension of the investment period as applied to BFO, during which BFO could elect — by delivering written notice to the GP — to cease participation in all future capital calls. BFO would remain a limited partner with respect to investments already funded prior to the exercise of the suspension right, and would continue to receive distributions and bear its pro rata share of fund-level expenses in respect of those funded investments.

The parties agree on the concept of an investor-level key person suspension right. The dispute is over the duration of the suspension period during which BFO may evaluate the GP's remediation plan and decide whether to exercise its right to cease future capital calls.

BFO's Initial Position (First Draft Side Letter, February 28)

BFO's initial draft proposed a 90-day suspension period following a Key Person Event. During this 90-day window, BFO would evaluate the circumstances of the departure, the GP's plans for successor leadership, and any proposed replacement key person. If BFO elected to cease participation in future capital calls, it would deliver written notice to the GP prior to the expiration of the 90-day period. If BFO did not deliver such notice, the suspension would terminate and BFO's capital call obligations would resume in full.

GP's Position (GP Markup, March 4)

The GP rejected the 90-day suspension as drafted in BFO's first draft side letter. The GP's counter-proposal was a 30-day notice right (rather than a suspension), under which BFO would have 30 days following a Key Person Event to deliver written notice electing to cease future capital calls. Notably, the GP's formulation characterized this as a "notice right" rather than a "suspension," which the GP argued was an important distinction: during a notice right period, the investment period would not be suspended as applied to BFO, and capital calls could continue to be issued and would remain due and payable unless and until BFO affirmatively elected to exercise the notice right.

The GP's stated rationale for limiting the period to 30 days and characterizing it as a notice right (rather than a suspension) was that a 90-day suspension would create significant operational uncertainty for Fund IV. If BFO's capital call obligations were suspended for 90 days, the GP would be unable to rely on BFO's $75 million commitment for planning and capital allocation purposes during that period, which could impair the GP's ability to execute on investment opportunities and manage the Fund's capital call schedule.

Second Draft Compromise (March 7, C&H)

In the Second Draft Side Letter delivered on March 7, C&H narrowed BFO's proposed suspension period from 90 days to 60 days as a compromise position. The second draft retained the characterization of the right as a "suspension" (not merely a notice right), meaning that BFO's capital call obligations would be suspended during the 60-day period and BFO would not be in default under the LPA for declining to fund capital calls issued during the suspension window. This compromise moved meaningfully from BFO's initial 90-day position while preserving the substantive character of the right.

Recommended Talking Points for the Call

We recommend the following talking points for the key person suspension discussion:

1. Centrality of Ellsworth and Narayan to BFO's Investment Thesis. BFO should emphasize that Conrad Ellsworth and Priya Narayan are central to BFO's decision to consider committing capital to Fund IV. Their combined track record across Meridian Peak's prior funds (Funds I–III, representing approximately $3.2 billion in aggregate commitments) is the foundational element of BFO's underwriting thesis. BFO's investment committee evaluated Fund IV primarily on the basis of Ellsworth's and Narayan's demonstrated ability to source, execute, and manage investments across market cycles. A departure by either key person would fundamentally alter the investment proposition that BFO evaluated, and BFO's protection in that scenario must be commensurate with the significance of the personnel risk.

2. Suspension vs. Notice Right. BFO should firmly resist the GP's attempt to recharacterize the right from a "suspension" to a mere "notice right." The distinction is substantive and consequential. Under a suspension, BFO's capital call obligations are tolled during the suspension period, and BFO is not exposed to default risk for declining to fund during that window. Under a notice right, capital calls continue to accrue and BFO must affirmatively elect within a compressed timeframe or lose the protection entirely. A suspension right provides BFO with the breathing room to conduct a meaningful assessment of successor leadership without the pressure of ongoing capital call obligations. This is consistent with the approach taken in the LPA itself: Section 9.4 of the LPA contemplates a fund-level suspension mechanism upon a Key Person Event, not merely a notice right. BFO's side-letter provision is designed to operate as a parallel individual right consistent with the fund-level architecture.

3. Inadequacy of 30 Days. A 30-day period is insufficient for BFO to conduct a meaningful assessment of the GP's remediation plan and any proposed replacement key person. Evaluating a leadership transition at a $1.5 billion private equity fund requires BFO to assess the qualifications and track record of the proposed successor, evaluate the impact of the departure on the Fund's existing portfolio and pipeline, consult with BFO's investment committee (which must coordinate the schedules of four members, including Julian R. Hargrove), and make a considered decision regarding the future of a $75 million commitment. This process cannot be responsibly compressed into 30 calendar days — or, more precisely, approximately 22 business days.

4. Consistency with LPA Architecture. As noted above, the LPA's own key person provision in Section 9.4 contemplates a fund-level suspension mechanism. BFO's side-letter right is designed to operate in parallel with that fund-level protection, not to replace or supersede it. The side-letter provision merely allows BFO to exercise an individual right that is conceptually consistent with the collective right already embedded in the LPA. The GP should not object to affording BFO a right that mirrors a protection the GP has already agreed to at the fund level.

Fallback Position.

• Preferred Outcome: 90-day suspension period, as proposed in BFO's initial draft. If the GP will agree to restore the 90-day period, BFO is willing to include a constructive cure provision as a concession: if the GP designates a successor key person who is approved by the LPAC within the 90-day suspension period, the suspension terminates automatically upon such approval, and BFO's capital call obligations resume in full without further action. This provision addresses the GP's concern about prolonged operational uncertainty while preserving BFO's right to a meaningful evaluation period.

• Fallback: The 60-day suspension period as set forth in the Second Draft Side Letter is acceptable as a fallback and represents BFO's floor. BFO should not agree to a suspension period shorter than 60 days.

• Hard Line: BFO should not accept a mere "notice right" in lieu of a genuine suspension right. The characterization of the right as a suspension — with tolling of capital call obligations and protection against default — is a non-negotiable element of BFO's position. If the GP insists on a notice-right formulation, this item should be tabled for further discussion, and C&H will escalate to the investment committee.

D. Agenda Item 4: Additional Bracketed Items

In addition to the three principal items discussed above, several secondary provisions in the Draft Side Letter contain bracketed language reflecting minor areas of disagreement. We address each of these below. While individually less significant than the excuse cap, MFN anchor carve-out, and key person suspension issues, these items will likely arise during the call and BFO should be prepared to address them efficiently.

D.1. Co-Investment Mechanics (Section 5 of Draft Side Letter)

Status of Agreement: The parties are in general agreement on the core terms of BFO's co-investment right. Specifically, the following terms have been agreed in principle:

• BFO will receive a pro rata co-investment opportunity on any Fund IV deal in which the Fund's equity investment exceeds $100,000,000;

• Co-investments by BFO will be made at no management fee and no carried interest;

• BFO's co-investment allocation will be up to BFO's pro rata share (based on BFO's percentage commitment relative to total fund commitments).

Remaining Bracketed Issue: The sole remaining area of disagreement relates to the response period for co-investment notices. The GP's markup conditioned BFO's co-investment right on BFO responding to co-investment notices within five (5) business days of receipt. BFO's draft provides for a response period of ten (10) business days.

Recommended Position: We recommend that BFO accept the 5-business-day response period, provided that the GP agrees to include a provision clarifying that BFO's failure to respond within the 5-business-day notice period will be treated as a declination of the specific co-investment opportunity and will not constitute a waiver of BFO's right to receive and participate in future co-investment opportunities. This distinction is important: without such a clarification, the GP could argue that a single missed deadline extinguishes BFO's co-investment rights for the remainder of the Fund's term.

Fallback: If the GP resists the non-waiver clarification, BFO should propose a compromise response period of seven (7) business days as an alternative.

D.2. K-1 Delivery Timeline (Section 10 of Draft Side Letter)

BFO's Position: BFO's draft provides for delivery of Schedule K-1 tax information within seventy-five (75) days following the end of each fiscal year of the Fund. This accelerated timeline is important to BFO because the Hargrove family's personal tax filings and related estate and trust planning require timely receipt of K-1 information from all investment vehicles.

GP's Position: The LPA provides for K-1 delivery within one hundred twenty (120) days of fiscal year-end as the standard timeline. The GP's markup flagged BFO's 75-day proposal as "aggressive" and cited the standard processing timeline of Granite Ledger Fund Services LLC (the Fund's administrator) and the audit schedule of Brockton Marsh & Associates LLP (the Fund's independent auditor) as constraints on the GP's ability to deliver K-1s on an accelerated basis. The GP expressed concern that committing to a 75-day hard deadline could result in the delivery of preliminary or estimated K-1 data that may require subsequent revision, potentially causing confusion and additional administrative burden for both parties.

Recommended Position: BFO should maintain 75 days as the target delivery date, but should accept the inclusion of a "commercially reasonable efforts" qualifier to address the GP's operational concerns. However, BFO should insist on a hard backstop of ninety (90) days — meaning that while the GP will use commercially reasonable efforts to deliver final K-1s within 75 days, the GP is obligated to deliver final K-1s no later than 90 days following fiscal year-end, without qualification.

Fallback: If the GP will not accept a 75-day target with a 90-day backstop, BFO can accept 90 days as the primary deadline, provided that the GP commits to delivering interim estimated K-1 data (including estimated allocations of income, gain, loss, deduction, and credit) within 60 days of fiscal year-end. The interim estimates would allow BFO and its tax advisors to begin preparing the Hargrove family's tax filings on a timely basis, with final adjustments made upon receipt of the definitive K-1.

D.3. MFN Summary Delivery Timing

BFO's Position: BFO's draft provides that the GP must deliver the redacted MFN summary to BFO within fifteen (15) business days of the applicable closing.

GP's Position: The GP's markup proposed twenty (20) business days, citing the administrative burden of preparing and redacting multiple side-letter summaries, particularly in connection with closings at which a large number of limited partners are admitted simultaneously.

Recommended Position: We recommend that BFO accept twenty (20) business days for the MFN summary delivery timeline. This is a relatively minor point, and conceding here may create goodwill and a collaborative dynamic that can be leveraged in the discussion of more important items, particularly the excuse cap and key person suspension. Importantly, even at a 20-business-day delivery timeline, the overall MFN election process provides BFO with adequate time to review and elect: BFO would receive the summary within 20 business days of the applicable close and would then have an additional 20 business days (the agreed MFN Election Period) to review the summary and make its election. The total elapsed time from close to election deadline would be approximately 40 business days (roughly 8 calendar weeks), which is sufficient for a thorough review.

We suggest that this item be conceded early in the call, as a demonstration of BFO's willingness to be reasonable and to reach practical compromises on secondary points.

D.4. Placement Agent Fee Offset (Section 11 of Draft Side Letter)

Status of Agreement: The parties are in general agreement on the placement agent fee offset. The key terms are as follows:

• Pinnacle Capital Markets LLC served as the placement agent in connection with BFO's investment in Fund IV;

• The placement agent fee is 1.0% of BFO's capital commitment, equaling $750,000 ($75,000,000 × 1.0%);

• The fee will be offset 100% against management fees payable by BFO to the GP.

Remaining Open Point: The GP's markup requested that the $750,000 offset be applied ratably over the investment period (which is four years under the LPA), rather than being front-loaded against the first management fee installment as BFO's draft contemplated. Under ratable application, the offset would be applied in equal annual installments of $187,500 per year over the four-year investment period, reducing BFO's net management fee obligation by that amount in each year.

Recommended Position: We recommend that BFO accept ratable application of the placement fee offset. The net economic impact to BFO is identical under either approach — the total offset remains $750,000 regardless of the timing of application. Ratable application is administratively simpler for the GP and for Granite Ledger Fund Services LLC, and is the more conventional approach in our experience. Conceding on this point costs BFO nothing in economic terms (apart from a modest time-value-of-money difference, which is de minimis in this context) and further demonstrates BFO's constructive approach to the negotiation.

IV. NEGOTIATION STRATEGY AND PRIORITIZATION

Based on our assessment of the open points, BFO's relative interests, and the likely dynamics of the call, we recommend the following prioritization framework:

Priority 1 — Must-Have: The aggregate excuse cap must be set at no less than 20% of BFO's capital commitment. BFO must maintain its right to exercise excuse and exclusion rights with respect to all four agreed categories (cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets). An excuse cap below 20% is not acceptable and would require further investment committee authorization before BFO could agree.

Priority 2 — High: The key person suspension period must be at least 60 days (BFO's target remains 90 days with a constructive cure provision). The right must be characterized as a genuine suspension — not a mere notice right — with tolling of BFO's capital call obligations during the suspension period.

Priority 3 — Important: The MFN Anchor Investor carve-out should be limited to economic terms, or at a minimum, enhanced reporting and transparency rights should be preserved outside the scope of the carve-out. This is an important governance and information-access objective for BFO.

Priority 4 — Desirable but Concedable: The following items are desirable but can be conceded in whole or in part to facilitate agreement on Priorities 1 through 3:

• Co-investment response period (concedable to 5–7 business days, with non-waiver language);

• K-1 delivery timeline (concedable to 90 days, with interim estimated data at 60 days);

• MFN summary delivery timing (concedable to 20 business days);

• Placement agent fee offset application (concedable to ratable over the investment period).

General Approach: We recommend that BFO's representatives be prepared to concede on Priority 4 items relatively early in the call. Doing so will establish a collaborative and constructive tone, demonstrate that BFO is negotiating in good faith, and build goodwill and leverage for the more difficult discussions on Priorities 1 through 3. If the call is proceeding sequentially through the agenda, we suggest addressing the Priority 4 items first (or, if the GP raises them, disposing of them quickly) before turning to the more complex issues.

If the GP shows meaningful movement on the excuse cap (toward 20% or above) and the key person suspension (toward 60 days or above), BFO should consider signaling flexibility on the MFN Anchor Investor carve-out scope as part of a package resolution. Specifically, if the GP moves to 20% on the excuse cap (with an ERISA carve-out) and 60 days on the key person suspension, BFO could offer to accept a broader anchor carve-out on the MFN in exchange, subject to the reporting-rights carve-out described in Section III.B above. This package approach may be more effective than negotiating each item in isolation.

Pamela Cross will manage the pacing and sequencing of the discussion. If the call is not productive or the GP's positions remain materially adverse to BFO's interests, Pamela will suggest tabling the remaining open items and scheduling a follow-up call, rather than making unplanned concessions under time pressure.

V. ITEMS ALREADY RESOLVED / NOT IN DISPUTE

For completeness and context, the following provisions of the side letter have been agreed in substance between the parties and are not expected to require discussion on the March 11 call. We include this summary so that BFO's representatives have a comprehensive picture of the current state of the negotiation and can confirm, if asked by the GP or Ashford Crane, that these items are settled:

Management Fee Reduction. The GP's first markup accepted BFO's proposed management fee structure: 1.50% per annum on committed capital during the investment period, stepping down to 1.25% per annum on invested capital following the expiration of the investment period. This represents a meaningful reduction from the LPA's standard management fee of 2.00% on committed capital during the investment period and 1.50% on invested capital thereafter. This provision is agreed and closed.

Carried Interest. The LPA provides for carried interest of 20% over an 8% preferred return, calculated on a whole-fund (European) waterfall basis. BFO did not seek any modification to the carried interest provisions in the side letter, and the GP did not propose any changes. This provision is not in dispute.

Transfer Rights. BFO has the right to transfer its limited partnership interest in the Fund to Hargrove family entities (including trusts, estates, and family-controlled entities) without the GP's prior consent, subject to compliance with applicable securities laws and tax requirements (including delivery of customary transfer opinions and tax representations). This provision was agreed in the GP's first markup and is closed.

Confidentiality Carve-Outs. The side letter includes agreed carve-outs from the LPA's confidentiality provisions permitting BFO to disclose Fund-related information to BFO's tax, legal, and accounting advisors, members of the Hargrove family, and applicable regulatory authorities. This provision is agreed and closed.

Excuse Categories. As discussed in Section III.A above, the parties have agreed on the four categories of investments subject to BFO's excuse and exclusion rights (cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets). The dispute is limited to the aggregate cap on excused investments, not the categories themselves.

Excuse Exercise Period. The parties have agreed that BFO's excuse right must be exercised within fifteen (15) business days after BFO's receipt of the applicable investment notice or capital call notice. This is settled.

MFN Commitment Threshold. The $50,000,000 minimum commitment threshold for MFN-eligible limited partners is agreed.

MFN Anchor Investor Threshold. The $200,000,000 dollar threshold for Anchor Investors is agreed. As discussed in Section III.B above, the dispute concerns the scope of the carve-out, not the threshold amount.

MFN Election Period. The 20-business-day MFN Election Period (measured from BFO's receipt of the redacted MFN summary) is agreed.

Enhanced Reporting. The following enhanced reporting provisions are substantially agreed, subject only to minor language edits that C&H expects to resolve in the next round of drafting:

• Quarterly portfolio-level reports delivered within 45 days of quarter-end;

• Audited annual financial statements delivered within 90 days of fiscal year-end;

• Annual ESG reporting covering Fund IV's portfolio companies.

Co-Investment Threshold and Economics. The core co-investment terms are agreed in principle: BFO receives a pro rata co-investment opportunity on deals in which Fund IV's equity investment exceeds $100,000,000, at no management fee and no carried interest, up to BFO's pro rata share. The sole remaining bracketed item is the response period for co-investment notices, as discussed in Section III.D.1 above.

VI. PROCEDURAL REMINDERS

We wish to highlight the following procedural matters for BFO's consideration in connection with the call and the broader Fund IV investment process:

Investment Committee Approval. BFO's investment committee approval is required before BFO can execute the side letter, the subscription agreement, or make any binding capital commitment to Fund IV. Under BFO's internal governance procedures, investment committee approval requires the affirmative vote of at least three (3) of the committee's four (4) members, with Julian R. Hargrove holding individual veto authority. The current negotiation is being conducted without prejudice to investment committee approval, and all terms agreed during the side-letter negotiation (whether on the March 11 call or otherwise) remain subject to ratification by the investment committee at the appropriate time.

No Binding Commitments on the Call. Consistent with the foregoing, BFO's representatives should not make any binding commitments on the call. Agreements reached during the call should be characterized as subject to documentation in a revised draft of the side letter and to investment committee approval. Pamela Cross will manage this framing on the call.

First Close Timeline. Fund IV's anticipated first close is April 30, 2024. The final close deadline under the LPA is October 31, 2024. If BFO intends to participate in the first close — which is BFO's current expectation — the side letter and subscription documents (including the subscription agreement, investor questionnaire, and any required regulatory certifications) would need to be fully negotiated, executed, and delivered well in advance of the April 30 date. Given the typical lead time for document preparation, internal review, and execution logistics, we recommend targeting completion of all documentation no later than approximately April 15, 2024. This underscores the importance of making substantive progress on the remaining open points during the March 11 call.

Post-Call Deliverables. Following the March 11 call, C&H will prepare a conference call summary memorandum documenting the substance of the discussion, any agreements or compromises reached, and any items tabled for further negotiation. If substantive progress is made on the call, C&H will also prepare a revised (third) draft of the side letter reflecting agreed outcomes, for circulation to Ashford Crane. We anticipate that the post-call memorandum can be delivered to BFO within two (2) business days of the call, and that a third draft side letter, if warranted, can be circulated within four (4) to five (5) business days.

VII. REQUESTED ACTIONS FROM BFO PRIOR TO THE CALL

In order to ensure that BFO's representatives and C&H are fully prepared for the March 11 call, we respectfully request that BFO take the following actions prior to the call:

1. Confirm Attendance. Please confirm the attendance of Sandra M. Whitfield and Derek T. Calloway on the March 11 call. If either Sandra or Derek is unavailable, please advise C&H promptly so that we can coordinate with Ashford Crane regarding rescheduling or alternative representation.

2. Confirm Fallback Authorization. Please confirm that BFO authorizes C&H and BFO's representatives to offer the fallback positions described in this memorandum in the course of the March 11 call. We would specifically request confirmation of the following:

(a) Authorization to accept a 20% aggregate excuse cap with an ERISA carve-out, or a 20% aggregate excuse cap inclusive of all four excuse categories, as BFO's floor position on the excuse cap;

(b) Authorization to accept a 60-day key person suspension period as BFO's floor position (with a target of 90 days with a constructive cure provision);

(c) Authority to concede on Priority 4 items (co-investment response period, K-1 delivery timeline, MFN summary delivery timing, and placement fee offset application) as described in this memorandum; and

(d) Authority to signal flexibility on the MFN Anchor Investor carve-out scope as part of a package resolution, if the GP demonstrates meaningful movement on the excuse cap and key person suspension.

3. Additional Points from Investment Committee Members. If Julian R. Hargrove, Renata Vasquez, or any other member of BFO's investment committee has additional points, concerns, or instructions that they wish to communicate in advance of the call, please relay those to C&H by close of business on Sunday, March 10, 2024, so that we can incorporate them into our preparation and talking points.

4. Contact Information. Please direct all communications regarding this memorandum and the March 11 call to:

Theresa Kim Senior Associate, Funds & Asset Management Calderwood & Harkness LLP 425 Lexington Avenue New York, New York 10017

Direct telephone and email to be provided separately under confidential cover.

VIII. APPENDICES

The following appendices are attached to this memorandum and should be reviewed by BFO's representatives in advance of the March 11 call:

Appendix A: Side-by-Side Comparison Chart — BFO Position vs. GP Position on All Open/Bracketed Points. This chart, prepared by Owen Fischer (associate, C&H), presents each disputed provision in columnar format, with BFO's position, the GP's position, the current status (agreed, bracketed, or tabled), and C&H's recommended resolution. The chart is designed to serve as a quick-reference document during the call.

Appendix B: Excerpt from the Second Draft Side Letter (March 7, 2024) — Bracketed Provisions Highlighted. This excerpt reproduces the text of each provision that remains in brackets in the current draft, with highlighting to identify the specific language in dispute. References to the corresponding discussion in this memorandum are included in marginal annotations.

Appendix C: Relevant LPA Provisions. This appendix contains excerpts from the Fund IV LPA dated December 20, 2023 (governed by the laws of the State of Delaware), including the following provisions cross-referenced in the side letter and in this memorandum:

• Section 9.4 (Key Person Provisions)

• Section 8.2 (Excuse and Exclusion Rights)

• Section 12.1 (Transfer Restrictions)

• Section 4.3 (Management Fee)

• Section 5.1 (Capital Calls and Drawdown Mechanics)

• Section 13.5 (Confidentiality)

This memorandum is intended solely for the use of the named recipients in connection with the representation of Briarwood Family Office LLC by Calderwood & Harkness LLP. It constitutes attorney work product and is protected by the attorney-client privilege. This memorandum should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. If you have received this memorandum in error, please notify the sender immediately and destroy all copies.

— End of Memorandum —

Party	Representative	Role
Calderwood & Harkness LLP	Pamela Cross	Partner, Funds & Asset Management
Calderwood & Harkness LLP	Theresa Kim	Senior Associate, Funds & Asset Management
Briarwood Family Office LLC	Sandra M. Whitfield	General Counsel
Briarwood Family Office LLC	Derek T. Calloway	Director of External Investments
Ashford Crane & Hewitt LLP	Harrison K. Drummond	Partner
Ashford Crane & Hewitt LLP	Elaine C. Woodbury	Senior Associate
Meridian Peak Capital Advisors LLC	Gavin R. Lockhart	Partner, Head of Investor Relations
Meridian Peak Capital Advisors LLC	Tamara Fujimoto	General Counsel & Chief Compliance Officer

CALDERWOOD & HARKNESS LLP Funds & Asset Management 425 Lexington Avenue New York, New York 10017
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT NOT FOR DISTRIBUTION BEYOND NAMED RECIPIENTS
MEMORANDUM
March 8, 2024
TO: Sandra M. Whitfield, General Counsel, Briarwood Family Office LLC Derek T. Calloway, Director of External Investments, Briarwood Family Office LLC
FROM: Theresa Kim, Senior Associate, Funds & Asset Management, Calderwood & Harkness LLP
CC: Pamela Cross, Partner, Funds & Asset Management, Calderwood & Harkness LLP
RE: Preparation Memorandum for Four-Party Conference Call — Side-Letter Negotiation, Meridian Peak Capital Partners Fund IV, L.P.
MATTER NO.: 1026-00001
This memorandum is a privileged and confidential attorney-client communication and constitutes attorney work product prepared in anticipation of litigation and/or in connection with the provision of legal advice. This document is intended solely for the use of the named recipients and should not be forwarded, copied, or disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. Any inadvertent disclosure does not constitute a waiver of any applicable privilege.
I. PURPOSE AND OVERVIEW
The purpose of this memorandum is to prepare Briarwood Family Office LLC ("BFO") and its representatives for the four-party conference call currently scheduled for Monday, March 11, 2024. The call will involve counsel and principals for both BFO and the general partner of Meridian Peak Capital Partners Fund IV, L.P. ("Fund IV" or the "Fund"), and is intended to discuss and attempt to resolve the remaining open points in the side-letter negotiation between BFO, on the one hand, and Fund IV and its general partner, Meridian Peak Capital Partners GP IV LLC (the "GP"), on the other.
By way of background, Calderwood & Harkness LLP ("C&H") delivered the second draft of the proposed side letter (the "Second Draft Side Letter") to Ashford Crane & Hewitt LLP ("Ashford Crane"), counsel to the GP, on March 7, 2024. That second draft was prepared in response to the GP's first markup of the initial draft side letter, which Ashford Crane circulated to C&H on March 4, 2024 (the "GP Markup"). The Second Draft Side Letter incorporated certain of the GP's proposed revisions where those revisions were consistent with BFO's investment policy and negotiation objectives, while maintaining BFO's core positions on several material provisions. As of the date of this memorandum, multiple provisions in the Second Draft Side Letter remain in brackets, reflecting areas of continued disagreement between the parties.
This memorandum is organized to serve as a comprehensive preparation guide for the call. Specifically, it:
•  Identifies each open point that is expected to be discussed on the call;
•  Summarizes the respective positions of BFO and the GP on each open point;
•  Provides our recommended talking points and framing for each issue;
•  Outlines fallback positions and negotiation parameters for BFO's consideration and pre-authorization; and
•  Addresses call logistics, negotiation strategy, procedural reminders, and requested pre-call actions.
For ease of reference, this memorandum should be read in conjunction with the following documents, copies of which have been provided to BFO under separate cover:
1.  Second Draft Side Letter, dated March 7, 2024 (delivered by C&H to Ashford Crane);
2.  GP Markup of First Draft Side Letter, received March 4, 2024 (prepared by Ashford Crane);
3.  BFO's initial side-letter term sheet, dated February 7, 2024 (prepared by Derek Calloway and reviewed by C&H);
4.  Amended and Restated Limited Partnership Agreement of Meridian Peak Capital Partners Fund IV, L.P., dated December 20, 2023 (the "LPA"); and
5.  C&H's excuse rights analysis memorandum, dated March 6, 2024 (internal attorney work product).
We note that the Second Draft Side Letter was prepared against the backdrop of BFO's proposed capital commitment of $75,000,000 to Fund IV, which represents approximately 5.0% of the Fund's target capitalization of $1,500,000,000. This commitment size, while meaningful, positions BFO below the Anchor Investor threshold discussed further in Section III.B below, and accordingly the terms available to BFO through the side letter and MFN process are of particular importance to ensuring that BFO's investment in Fund IV is appropriately structured.
II. CALL LOGISTICS
The details of the scheduled conference call are as follows:
Date: Monday, March 11, 2024
Time: To be confirmed. Owen Fischer (associate at C&H) is coordinating with Ashford Crane pursuant to a scheduling email dated March 6, 2024. We expect confirmation of the call time no later than close of business on Friday, March 8, 2024, and will circulate dial-in or video conference details promptly upon receipt.
Format: Telephone and/or video conference (platform to be confirmed with scheduling details).
Proposed Attendees:
Roles and Responsibilities on the Call: We propose that Pamela Cross take the lead on presenting and discussing the legal and structural points outlined in this memorandum, including the drafting of specific side-letter provisions, the interplay between the side letter and the LPA, and the market-standard analysis supporting BFO's positions. Sandra Whitfield and Derek Calloway should be prepared to address BFO's investment considerations, the commercial rationale for the terms BFO has requested, BFO's investment policy constraints (particularly with respect to the excuse categories), and any questions that the GP or its counsel may direct to BFO's principals regarding BFO's investment thesis for Fund IV. Theresa Kim will be available to address specific drafting points and to take notes for the post-call summary memorandum.
We would recommend that BFO's representatives avoid making binding commitments on the call without first consulting with C&H, particularly with respect to any proposals from the GP that deviate from the fallback parameters outlined in this memorandum.
III. AGENDA — OPEN POINTS FOR DISCUSSION
The following sections address each of the open points that we anticipate will be discussed on the March 11 call. We have organized these in order of anticipated significance, beginning with the two most material disputed provisions and concluding with the additional bracketed items that, while important, are more likely to be resolved through modest compromise.
A. Agenda Item 1: Excuse/Exclusion Rights Cap (Section 3 of Draft Side Letter)
Summary of the Issue
Section 3 of the Draft Side Letter provides BFO with excuse and exclusion rights with respect to four specified categories of investments. Specifically, BFO may elect to be excused from participating in any capital call or investment to the extent such capital call or investment relates to:
(a) cannabis-related assets, including direct or indirect investments in entities engaged in the cultivation, processing, distribution, or sale of cannabis or cannabis-derived products, regardless of the legality of such activities under applicable state law;
(b) gaming and casino properties, including investments in entities that derive a material portion of their revenue from gaming operations, casino facilities, or related hospitality assets;
(c) investments in or involving jurisdictions subject to comprehensive economic sanctions imposed by the United States, including sanctions administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury; and
(d) any investment that would cause BFO or any of its beneficial owners to be treated as holding "plan assets" within the meaning of Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the regulations promulgated thereunder by the U.S. Department of Labor.
The excuse right is exercisable by BFO within fifteen (15) business days of BFO's receipt of the applicable capital call notice or investment notice from the GP, consistent with the exercise period agreed to in the GP Markup. The parties have reached agreement on the four categories of excusable investments set forth above and on the exercise mechanics. There is no dispute as to the substance of the excuse categories or the procedural framework for exercising the excuse right.
The dispute between the parties centers on the aggregate cap on excused investments as a percentage of BFO's total capital commitment of $75,000,000. The aggregate cap is intended to limit the total dollar amount of capital calls from which BFO may be excused over the life of the Fund, and the parties' respective positions on this cap differ materially.
BFO's Position (as Stated in the Second Draft Side Letter)
BFO's Second Draft Side Letter provides for an aggregate excuse cap of 25% of BFO's total capital commitment, which equates to $18,750,000 (i.e., $75,000,000 × 25%). BFO's rationale for the 25% cap is grounded in the following considerations:
•  BFO's investment policy, as adopted by the Hargrove family and administered by BFO's investment committee, strictly prohibits direct or indirect exposure to cannabis-related assets and gaming/casino properties. These prohibitions are not discretionary; they reflect the Hargrove family's longstanding values-based investment criteria and are binding on BFO's investment professionals when deploying family capital.
•  A cap set at 15% (as proposed by the GP) may prove insufficient if Fund IV pursues multiple investments in the cannabis and gaming sectors, which are areas of growing activity in the private equity market. If BFO exhausts a 15% excuse cap, it would face the untenable choice of either (i) breaching its own investment policy by participating in excusable investments, or (ii) defaulting under the LPA by declining to fund capital calls in excess of the cap. Neither outcome is acceptable.
•  BFO's excuse categories are narrowly tailored and limited to four specific investment types, each of which is driven by genuine regulatory, legal, or policy constraints. BFO has not sought a broad "opt-out" right or a general excuse provision; the categories are specific and well-defined.
GP's Position (as Stated in the GP Markup, March 4)
The GP's first markup of the initial draft side letter counter-proposed an aggregate excuse cap of 15% of BFO's total capital commitment, equating to $11,250,000 (i.e., $75,000,000 × 15%). The GP's stated rationale for the 15% cap includes the following:
•  The GP asserts that higher excuse caps distort fund economics and create administrative complexity in connection with capital call management, overcall calculations, and the allocation of investment opportunities among limited partners.
•  The GP represents that a 15% aggregate excuse cap is consistent with the terms of side letters negotiated with limited partners in the GP's prior funds, including Meridian Peak Capital Partners Fund I, L.P., Meridian Peak Capital Partners Fund II, L.P., and Meridian Peak Capital Partners Fund III, L.P. (collectively, "Funds I–III"). The GP has characterized the 15% cap as its "standard" excuse cap for institutional investors.
•  The GP has expressed concern that a 25% cap, if granted to BFO, could establish a precedent that other limited partners may seek to invoke through their own MFN provisions, potentially resulting in a materially higher aggregate excuse cap across the Fund's investor base.
Recommended Talking Points for the Call
We recommend that Pamela Cross and Sandra Whitfield frame BFO's position on the excuse cap using the following talking points:
1.  Narrow Tailoring of Excuse Categories. BFO should emphasize that its excuse categories are narrowly tailored and limited to four specific investment types. BFO is not seeking a generalized opt-out right or a broad discretionary excuse. Each of the four categories is driven by a genuine, identifiable constraint — two are driven by BFO's values-based investment policy (cannabis and gaming), one is driven by U.S. law and OFAC sanctions compliance (sanctioned jurisdictions), and one is driven by federal statutory requirements under ERISA (plan assets). The narrow scope of the excuse categories meaningfully reduces the likelihood that BFO will approach or exhaust the cap, which in turn should mitigate the GP's concerns about fund economics and administrative complexity.
2.  ERISA Plan-Asset Excuse as Legal Necessity. BFO should argue that the ERISA plan-asset excuse is not a commercial preference but rather a legal necessity. To the extent BFO or any of its beneficial owners could be treated as holding "plan assets" as a result of a Fund IV investment, BFO could become subject to ERISA's prohibited transaction rules and fiduciary standards, with significant legal and financial consequences. The ERISA excuse protects both BFO and the Fund from inadvertent regulatory exposure. Given the legal (as opposed to commercial) nature of this excuse category, BFO's position is that the ERISA excuse should not count toward the aggregate cap at all, or at minimum should be treated differently from the policy-driven excuse categories. This argument supports a higher cap or, alternatively, a carve-out that preserves the effective cap for policy-driven excuses while removing the ERISA excuse from the cap calculation entirely.
3.  De Minimis Impact on Fund Economics. BFO's $75,000,000 commitment represents approximately 5.0% of Fund IV's target capitalization of $1,500,000,000. Even at a 25% excuse cap, the maximum aggregate amount that BFO could excuse from capital calls would be $18,750,000, which represents approximately 1.25% of total targeted fund commitments. This is a modest figure in the context of a $1.5 billion fund, and the practical impact on fund-level economics, overcall mechanics, and investment allocation would be negligible.
4.  Market Comparables. C&H's excuse rights analysis memorandum, dated March 6, 2024, surveyed excuse cap provisions in side letters across a sample of comparable private equity funds with target capitalizations in excess of $1.0 billion. That analysis indicates that aggregate excuse caps in the range of 20% to 30% of an investor's commitment are common for institutional investors with policy-driven excuse rights. A 15% cap, while not unprecedented, falls below the median for investors in BFO's commitment size range and with similarly tailored excuse categories. We recommend referencing this analysis on the call at an appropriate juncture, without disclosing the specific funds or LPs surveyed.
Fallback Position.  BFO's authorized fallback positions on the excuse cap are as follows, in order of preference:
•  Preferred Outcome: 25% aggregate cap on excused investments, as set forth in the Second Draft Side Letter.
•  First Fallback: If the GP will not accept 25%, BFO is prepared to accept a 20% aggregate cap on excused investments ($75,000,000 × 20% = $15,000,000), provided that ERISA plan-asset excuses are excluded from the cap calculation. Under this formulation, the 20% cap would apply only to excuses exercised with respect to cannabis-related assets, gaming/casino properties, and investments in sanctioned jurisdictions. ERISA plan-asset excuses would be unlimited (or subject to a separate, higher cap). This compromise preserves BFO's core policy-driven excuse rights while acknowledging the GP's desire for a lower headline cap.
•  Second Fallback / Hard Floor: If the GP rejects the ERISA carve-out from the cap, BFO's hard floor is a 20% aggregate cap inclusive of all four excuse categories. BFO should not agree to a cap below 20% without obtaining further authorization from BFO's investment committee.
•  Do Not Go Below: Under no circumstances should BFO's representatives agree to an aggregate excuse cap below 20% of BFO's capital commitment on this call. If the GP's position remains at 15% and the parties cannot reach agreement, the item should be tabled for further discussion off-line, and C&H will consult with the investment committee regarding next steps.
B. Agenda Item 2: Most Favored Nation (MFN) — Anchor Investor Carve-Out Scope (Section 2 of Draft Side Letter)
Summary of the Issue
Section 2 of the Draft Side Letter contains BFO's most favored nation ("MFN") clause, which entitles BFO to elect to receive any economic or governance term granted by the GP (or the Fund) to any other limited partner that has committed $50,000,000 or more to Fund IV. The MFN clause is a standard investor protection provision and the parties have agreed on its core framework, including the $50,000,000 commitment threshold for MFN-eligible limited partners.
The MFN election mechanics, as currently drafted and substantially agreed, operate as follows:
•  The GP is required to deliver to BFO a redacted summary of all material side-letter terms granted to other limited partners within fifteen (15) business days of the applicable closing at which BFO is admitted to the Fund (or, if BFO is admitted at the initial closing, within fifteen (15) business days of any subsequent closing at which additional side letters are entered into).
•  BFO's election to adopt any additional terms identified in the MFN summary must be made within twenty (20) business days of BFO's receipt of the summary (the "MFN Election Period").
•  The MFN is subject to the following agreed exclusions: (i) terms granted to limited partners committing $200,000,000 or more to the Fund (referred to as "Anchor Investors"); (ii) regulatory accommodations specifically tailored to ERISA plans, tax-exempt entities, or governmental plan investors, to the extent such accommodations address regulatory requirements unique to those investor types; and (iii) terms made available to GP affiliates or related persons.
The parties are in agreement on the MFN concept, the $50,000,000 threshold for MFN-eligible LPs, the $200,000,000 threshold for Anchor Investors, the MFN Election Period, and the exclusions for regulatory accommodations and GP affiliate terms. The dispute concerns the scope of the Anchor Investor carve-out — specifically, whether the carve-out applies only to economic terms or extends to all terms, including governance and information rights.
BFO's Position.  BFO's position, as reflected in the Second Draft Side Letter, is that the $200,000,000 Anchor Investor threshold is acceptable. BFO does not object to the principle that limited partners committing significantly larger amounts to the Fund may receive differentiated treatment. However, BFO's position is that the Anchor Investor carve-out should apply only to economic terms — specifically, management fee reductions, carried interest modifications, co-investment fee arrangements, and similar economic concessions — and should not extend to governance or information rights.
BFO's concern is as follows: if the Anchor Investor carve-out is a blanket exclusion covering all terms (as the GP has proposed), then Anchor Investors could receive enhanced governance and transparency rights — such as LPAC seats, expanded consent rights, veto rights over certain fund actions, or enhanced reporting and information access — and those rights would be entirely excluded from the MFN. BFO would have no ability to elect to receive those same governance and transparency protections, regardless of BFO's own commitment size or the nature of the rights at issue.
BFO views governance and transparency rights as fundamentally different from economic concessions. Economic concessions (such as fee discounts) reflect the commercial bargain associated with a larger commitment and have a direct financial cost to the GP or the Fund. Governance and transparency rights, by contrast, promote fund accountability, investor oversight, and informed decision-making; they are not zero-sum and their extension to additional investors does not impose a comparable cost on the GP.
GP's Position (from the GP Markup)
The GP's first markup proposed that the Anchor Investor carve-out be a blanket exclusion — meaning that all terms granted to Anchor Investors, whether economic, governance-related, or informational in nature, would be excluded from the MFN. The GP's rationale for this position is that Anchor Investors' significantly larger commitments (in excess of $200,000,000, representing more than 13% of the Fund's target capitalization) justify differentiated treatment across all dimensions of the fund relationship, not solely with respect to economics. The GP has characterized this as consistent with its approach in Funds I–III and as necessary to attract and retain Anchor Investor commitments.
Recommended Talking Points for the Call
We recommend framing BFO's position on the MFN anchor carve-out as follows:
1.  Acknowledge Economic Distinction. BFO should begin by acknowledging that fee-based economic concessions for Anchor Investors are market standard and that BFO does not seek to challenge the GP's ability to offer differentiated economics to limited partners committing $200 million or more. BFO understands and accepts that Anchor Investors may receive management fee reductions, carried interest modifications, co-investment fee waivers, and similar economic incentives that reflect their proportionally larger commitments to the Fund. This acknowledgment should establish that BFO's position is reasonable and targeted, rather than an attempt to undermine the Anchor Investor relationship.
2.  Draw the Governance/Transparency Distinction. BFO should then clearly articulate the distinction between economic terms and governance/transparency terms. Governance and transparency rights — including LPAC observer or voting seats, expanded consent rights, enhanced reporting timelines, ESG reporting, portfolio-level data access, and similar provisions — serve a fundamentally different function than economic concessions. They promote fund accountability, enable informed investor decision-making, and support the oversight framework contemplated by the LPA. Importantly, the extension of governance and transparency rights to additional limited partners does not impose a material cost on the GP or dilute the value of those rights for Anchor Investors. These rights are not zero-sum: an LPAC observer seat for BFO does not diminish the value of an LPAC voting seat held by an Anchor Investor.
3.  Market Data. C&H's internal MFN comparison matrix, prepared as an internal working paper dated February 5, 2024, analyzed MFN provisions across a sample of comparable private equity funds. That analysis indicates that approximately 60% of comparable fund side letters limit the Anchor Investor carve-out to economic terms only, while approximately 40% adopt a blanket carve-out covering all terms. The majority-market position supports BFO's proposed approach. We recommend referencing this data point on the call, without disclosing specific fund names or investor identities.
4.  Proposed Compromise Language. BFO should propose the following compromise formulation for the Anchor Investor carve-out: the carve-out applies to "economic terms, including management fee reductions, carried interest modifications, and co-investment fee arrangements," while governance, reporting, and information rights granted to Anchor Investors remain subject to MFN election by qualifying limited partners (including BFO). This language preserves the GP's ability to offer differentiated economics while ensuring that governance and transparency protections flow through the MFN to all qualifying investors.
Fallback Position.  
•  Preferred Outcome: Anchor Investor carve-out limited to economic terms, with governance, reporting, and information rights remaining subject to MFN election.
•  Fallback: If the GP insists on a blanket carve-out covering both economic and governance terms, BFO can accept the blanket carve-out provided that enhanced reporting rights — specifically, quarterly and annual financial reporting timelines, ESG reporting obligations, and portfolio-level data access — are expressly excluded from the carve-out regardless of the committing LP's commitment level. Under this formulation, BFO would concede on LPAC seats, consent rights, and other governance provisions, but would preserve its core transparency and reporting objectives through a targeted carve-out to the carve-out.
•  This fallback preserves BFO's most important objectives (transparency and information access) while deferring to the GP on the distinction between economic and non-economic governance rights. We believe this is a defensible compromise that the GP may find acceptable, particularly if BFO demonstrates flexibility on other items during the call.
C. Agenda Item 3: Key Person Suspension Duration (Section 7 of Draft Side Letter)
Summary of the Issue
The Fund IV LPA contains standard key person provisions, set forth in Section 9.4 of the LPA, identifying Conrad J. Ellsworth (Founder and Managing Partner of Meridian Peak Capital Advisors LLC) and Priya Narayan (Partner and Chief Investment Officer of Meridian Peak Capital Advisors LLC) as the Fund's designated key persons. Under the LPA, a "Key Person Event" occurs if either Ellsworth or Narayan ceases to devote substantially all of his or her professional time and attention to the affairs of the Fund, subject to customary exceptions for temporary absences, illness, and similar circumstances. Upon the occurrence of a Key Person Event, the LPA provides for a fund-level suspension of the investment period, during which the GP may not make new investments (other than follow-on investments and commitments to fund existing obligations), pending a vote of the LPAC or the advisory committee on whether to reinstate the investment period.
In Section 7 of the Draft Side Letter, BFO sought an additional, investor-level key person protection that would operate in parallel with (and in addition to) the fund-level key person mechanism in the LPA. Specifically, BFO proposed that upon the departure of either Ellsworth or Narayan, there would be a suspension of the investment period as applied to BFO, during which BFO could elect — by delivering written notice to the GP — to cease participation in all future capital calls. BFO would remain a limited partner with respect to investments already funded prior to the exercise of the suspension right, and would continue to receive distributions and bear its pro rata share of fund-level expenses in respect of those funded investments.
The parties agree on the concept of an investor-level key person suspension right. The dispute is over the duration of the suspension period during which BFO may evaluate the GP's remediation plan and decide whether to exercise its right to cease future capital calls.
BFO's Initial Position (First Draft Side Letter, February 28)
BFO's initial draft proposed a 90-day suspension period following a Key Person Event. During this 90-day window, BFO would evaluate the circumstances of the departure, the GP's plans for successor leadership, and any proposed replacement key person. If BFO elected to cease participation in future capital calls, it would deliver written notice to the GP prior to the expiration of the 90-day period. If BFO did not deliver such notice, the suspension would terminate and BFO's capital call obligations would resume in full.
GP's Position (GP Markup, March 4)
The GP rejected the 90-day suspension as drafted in BFO's first draft side letter. The GP's counter-proposal was a 30-day notice right (rather than a suspension), under which BFO would have 30 days following a Key Person Event to deliver written notice electing to cease future capital calls. Notably, the GP's formulation characterized this as a "notice right" rather than a "suspension," which the GP argued was an important distinction: during a notice right period, the investment period would not be suspended as applied to BFO, and capital calls could continue to be issued and would remain due and payable unless and until BFO affirmatively elected to exercise the notice right.
The GP's stated rationale for limiting the period to 30 days and characterizing it as a notice right (rather than a suspension) was that a 90-day suspension would create significant operational uncertainty for Fund IV. If BFO's capital call obligations were suspended for 90 days, the GP would be unable to rely on BFO's $75 million commitment for planning and capital allocation purposes during that period, which could impair the GP's ability to execute on investment opportunities and manage the Fund's capital call schedule.
Second Draft Compromise (March 7, C&H)
In the Second Draft Side Letter delivered on March 7, C&H narrowed BFO's proposed suspension period from 90 days to 60 days as a compromise position. The second draft retained the characterization of the right as a "suspension" (not merely a notice right), meaning that BFO's capital call obligations would be suspended during the 60-day period and BFO would not be in default under the LPA for declining to fund capital calls issued during the suspension window. This compromise moved meaningfully from BFO's initial 90-day position while preserving the substantive character of the right.
Recommended Talking Points for the Call
We recommend the following talking points for the key person suspension discussion:
1.  Centrality of Ellsworth and Narayan to BFO's Investment Thesis. BFO should emphasize that Conrad Ellsworth and Priya Narayan are central to BFO's decision to consider committing capital to Fund IV. Their combined track record across Meridian Peak's prior funds (Funds I–III, representing approximately $3.2 billion in aggregate commitments) is the foundational element of BFO's underwriting thesis. BFO's investment committee evaluated Fund IV primarily on the basis of Ellsworth's and Narayan's demonstrated ability to source, execute, and manage investments across market cycles. A departure by either key person would fundamentally alter the investment proposition that BFO evaluated, and BFO's protection in that scenario must be commensurate with the significance of the personnel risk.
2.  Suspension vs. Notice Right. BFO should firmly resist the GP's attempt to recharacterize the right from a "suspension" to a mere "notice right." The distinction is substantive and consequential. Under a suspension, BFO's capital call obligations are tolled during the suspension period, and BFO is not exposed to default risk for declining to fund during that window. Under a notice right, capital calls continue to accrue and BFO must affirmatively elect within a compressed timeframe or lose the protection entirely. A suspension right provides BFO with the breathing room to conduct a meaningful assessment of successor leadership without the pressure of ongoing capital call obligations. This is consistent with the approach taken in the LPA itself: Section 9.4 of the LPA contemplates a fund-level suspension mechanism upon a Key Person Event, not merely a notice right. BFO's side-letter provision is designed to operate as a parallel individual right consistent with the fund-level architecture.
3.  Inadequacy of 30 Days. A 30-day period is insufficient for BFO to conduct a meaningful assessment of the GP's remediation plan and any proposed replacement key person. Evaluating a leadership transition at a $1.5 billion private equity fund requires BFO to assess the qualifications and track record of the proposed successor, evaluate the impact of the departure on the Fund's existing portfolio and pipeline, consult with BFO's investment committee (which must coordinate the schedules of four members, including Julian R. Hargrove), and make a considered decision regarding the future of a $75 million commitment. This process cannot be responsibly compressed into 30 calendar days — or, more precisely, approximately 22 business days.
4.  Consistency with LPA Architecture. As noted above, the LPA's own key person provision in Section 9.4 contemplates a fund-level suspension mechanism. BFO's side-letter right is designed to operate in parallel with that fund-level protection, not to replace or supersede it. The side-letter provision merely allows BFO to exercise an individual right that is conceptually consistent with the collective right already embedded in the LPA. The GP should not object to affording BFO a right that mirrors a protection the GP has already agreed to at the fund level.
Fallback Position.  
•  Preferred Outcome: 90-day suspension period, as proposed in BFO's initial draft. If the GP will agree to restore the 90-day period, BFO is willing to include a constructive cure provision as a concession: if the GP designates a successor key person who is approved by the LPAC within the 90-day suspension period, the suspension terminates automatically upon such approval, and BFO's capital call obligations resume in full without further action. This provision addresses the GP's concern about prolonged operational uncertainty while preserving BFO's right to a meaningful evaluation period.
•  Fallback: The 60-day suspension period as set forth in the Second Draft Side Letter is acceptable as a fallback and represents BFO's floor. BFO should not agree to a suspension period shorter than 60 days.
•  Hard Line: BFO should not accept a mere "notice right" in lieu of a genuine suspension right. The characterization of the right as a suspension — with tolling of capital call obligations and protection against default — is a non-negotiable element of BFO's position. If the GP insists on a notice-right formulation, this item should be tabled for further discussion, and C&H will escalate to the investment committee.
D. Agenda Item 4: Additional Bracketed Items
In addition to the three principal items discussed above, several secondary provisions in the Draft Side Letter contain bracketed language reflecting minor areas of disagreement. We address each of these below. While individually less significant than the excuse cap, MFN anchor carve-out, and key person suspension issues, these items will likely arise during the call and BFO should be prepared to address them efficiently.
D.1. Co-Investment Mechanics (Section 5 of Draft Side Letter)
Status of Agreement: The parties are in general agreement on the core terms of BFO's co-investment right. Specifically, the following terms have been agreed in principle:
•  BFO will receive a pro rata co-investment opportunity on any Fund IV deal in which the Fund's equity investment exceeds $100,000,000;
•  Co-investments by BFO will be made at no management fee and no carried interest;
•  BFO's co-investment allocation will be up to BFO's pro rata share (based on BFO's percentage commitment relative to total fund commitments).
Remaining Bracketed Issue: The sole remaining area of disagreement relates to the response period for co-investment notices. The GP's markup conditioned BFO's co-investment right on BFO responding to co-investment notices within five (5) business days of receipt. BFO's draft provides for a response period of ten (10) business days.
Recommended Position: We recommend that BFO accept the 5-business-day response period, provided that the GP agrees to include a provision clarifying that BFO's failure to respond within the 5-business-day notice period will be treated as a declination of the specific co-investment opportunity and will not constitute a waiver of BFO's right to receive and participate in future co-investment opportunities. This distinction is important: without such a clarification, the GP could argue that a single missed deadline extinguishes BFO's co-investment rights for the remainder of the Fund's term.
Fallback: If the GP resists the non-waiver clarification, BFO should propose a compromise response period of seven (7) business days as an alternative.
D.2. K-1 Delivery Timeline (Section 10 of Draft Side Letter)
BFO's Position: BFO's draft provides for delivery of Schedule K-1 tax information within seventy-five (75) days following the end of each fiscal year of the Fund. This accelerated timeline is important to BFO because the Hargrove family's personal tax filings and related estate and trust planning require timely receipt of K-1 information from all investment vehicles.
GP's Position: The LPA provides for K-1 delivery within one hundred twenty (120) days of fiscal year-end as the standard timeline. The GP's markup flagged BFO's 75-day proposal as "aggressive" and cited the standard processing timeline of Granite Ledger Fund Services LLC (the Fund's administrator) and the audit schedule of Brockton Marsh & Associates LLP (the Fund's independent auditor) as constraints on the GP's ability to deliver K-1s on an accelerated basis. The GP expressed concern that committing to a 75-day hard deadline could result in the delivery of preliminary or estimated K-1 data that may require subsequent revision, potentially causing confusion and additional administrative burden for both parties.
Recommended Position: BFO should maintain 75 days as the target delivery date, but should accept the inclusion of a "commercially reasonable efforts" qualifier to address the GP's operational concerns. However, BFO should insist on a hard backstop of ninety (90) days — meaning that while the GP will use commercially reasonable efforts to deliver final K-1s within 75 days, the GP is obligated to deliver final K-1s no later than 90 days following fiscal year-end, without qualification.
Fallback: If the GP will not accept a 75-day target with a 90-day backstop, BFO can accept 90 days as the primary deadline, provided that the GP commits to delivering interim estimated K-1 data (including estimated allocations of income, gain, loss, deduction, and credit) within 60 days of fiscal year-end. The interim estimates would allow BFO and its tax advisors to begin preparing the Hargrove family's tax filings on a timely basis, with final adjustments made upon receipt of the definitive K-1.
D.3. MFN Summary Delivery Timing
BFO's Position: BFO's draft provides that the GP must deliver the redacted MFN summary to BFO within fifteen (15) business days of the applicable closing.
GP's Position: The GP's markup proposed twenty (20) business days, citing the administrative burden of preparing and redacting multiple side-letter summaries, particularly in connection with closings at which a large number of limited partners are admitted simultaneously.
Recommended Position: We recommend that BFO accept twenty (20) business days for the MFN summary delivery timeline. This is a relatively minor point, and conceding here may create goodwill and a collaborative dynamic that can be leveraged in the discussion of more important items, particularly the excuse cap and key person suspension. Importantly, even at a 20-business-day delivery timeline, the overall MFN election process provides BFO with adequate time to review and elect: BFO would receive the summary within 20 business days of the applicable close and would then have an additional 20 business days (the agreed MFN Election Period) to review the summary and make its election. The total elapsed time from close to election deadline would be approximately 40 business days (roughly 8 calendar weeks), which is sufficient for a thorough review.
We suggest that this item be conceded early in the call, as a demonstration of BFO's willingness to be reasonable and to reach practical compromises on secondary points.
D.4. Placement Agent Fee Offset (Section 11 of Draft Side Letter)
Status of Agreement: The parties are in general agreement on the placement agent fee offset. The key terms are as follows:
•  Pinnacle Capital Markets LLC served as the placement agent in connection with BFO's investment in Fund IV;
•  The placement agent fee is 1.0% of BFO's capital commitment, equaling $750,000 ($75,000,000 × 1.0%);
•  The fee will be offset 100% against management fees payable by BFO to the GP.
Remaining Open Point: The GP's markup requested that the $750,000 offset be applied ratably over the investment period (which is four years under the LPA), rather than being front-loaded against the first management fee installment as BFO's draft contemplated. Under ratable application, the offset would be applied in equal annual installments of $187,500 per year over the four-year investment period, reducing BFO's net management fee obligation by that amount in each year.
Recommended Position: We recommend that BFO accept ratable application of the placement fee offset. The net economic impact to BFO is identical under either approach — the total offset remains $750,000 regardless of the timing of application. Ratable application is administratively simpler for the GP and for Granite Ledger Fund Services LLC, and is the more conventional approach in our experience. Conceding on this point costs BFO nothing in economic terms (apart from a modest time-value-of-money difference, which is de minimis in this context) and further demonstrates BFO's constructive approach to the negotiation.
IV. NEGOTIATION STRATEGY AND PRIORITIZATION
Based on our assessment of the open points, BFO's relative interests, and the likely dynamics of the call, we recommend the following prioritization framework:
Priority 1 — Must-Have: The aggregate excuse cap must be set at no less than 20% of BFO's capital commitment. BFO must maintain its right to exercise excuse and exclusion rights with respect to all four agreed categories (cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets). An excuse cap below 20% is not acceptable and would require further investment committee authorization before BFO could agree.
Priority 2 — High: The key person suspension period must be at least 60 days (BFO's target remains 90 days with a constructive cure provision). The right must be characterized as a genuine suspension — not a mere notice right — with tolling of BFO's capital call obligations during the suspension period.
Priority 3 — Important: The MFN Anchor Investor carve-out should be limited to economic terms, or at a minimum, enhanced reporting and transparency rights should be preserved outside the scope of the carve-out. This is an important governance and information-access objective for BFO.
Priority 4 — Desirable but Concedable: The following items are desirable but can be conceded in whole or in part to facilitate agreement on Priorities 1 through 3:
•  Co-investment response period (concedable to 5–7 business days, with non-waiver language);
•  K-1 delivery timeline (concedable to 90 days, with interim estimated data at 60 days);
•  MFN summary delivery timing (concedable to 20 business days);
•  Placement agent fee offset application (concedable to ratable over the investment period).
General Approach: We recommend that BFO's representatives be prepared to concede on Priority 4 items relatively early in the call. Doing so will establish a collaborative and constructive tone, demonstrate that BFO is negotiating in good faith, and build goodwill and leverage for the more difficult discussions on Priorities 1 through 3. If the call is proceeding sequentially through the agenda, we suggest addressing the Priority 4 items first (or, if the GP raises them, disposing of them quickly) before turning to the more complex issues.
If the GP shows meaningful movement on the excuse cap (toward 20% or above) and the key person suspension (toward 60 days or above), BFO should consider signaling flexibility on the MFN Anchor Investor carve-out scope as part of a package resolution. Specifically, if the GP moves to 20% on the excuse cap (with an ERISA carve-out) and 60 days on the key person suspension, BFO could offer to accept a broader anchor carve-out on the MFN in exchange, subject to the reporting-rights carve-out described in Section III.B above. This package approach may be more effective than negotiating each item in isolation.
Pamela Cross will manage the pacing and sequencing of the discussion. If the call is not productive or the GP's positions remain materially adverse to BFO's interests, Pamela will suggest tabling the remaining open items and scheduling a follow-up call, rather than making unplanned concessions under time pressure.
V. ITEMS ALREADY RESOLVED / NOT IN DISPUTE
For completeness and context, the following provisions of the side letter have been agreed in substance between the parties and are not expected to require discussion on the March 11 call. We include this summary so that BFO's representatives have a comprehensive picture of the current state of the negotiation and can confirm, if asked by the GP or Ashford Crane, that these items are settled:
Management Fee Reduction. The GP's first markup accepted BFO's proposed management fee structure: 1.50% per annum on committed capital during the investment period, stepping down to 1.25% per annum on invested capital following the expiration of the investment period. This represents a meaningful reduction from the LPA's standard management fee of 2.00% on committed capital during the investment period and 1.50% on invested capital thereafter. This provision is agreed and closed.
Carried Interest. The LPA provides for carried interest of 20% over an 8% preferred return, calculated on a whole-fund (European) waterfall basis. BFO did not seek any modification to the carried interest provisions in the side letter, and the GP did not propose any changes. This provision is not in dispute.
Transfer Rights. BFO has the right to transfer its limited partnership interest in the Fund to Hargrove family entities (including trusts, estates, and family-controlled entities) without the GP's prior consent, subject to compliance with applicable securities laws and tax requirements (including delivery of customary transfer opinions and tax representations). This provision was agreed in the GP's first markup and is closed.
Confidentiality Carve-Outs. The side letter includes agreed carve-outs from the LPA's confidentiality provisions permitting BFO to disclose Fund-related information to BFO's tax, legal, and accounting advisors, members of the Hargrove family, and applicable regulatory authorities. This provision is agreed and closed.
Excuse Categories. As discussed in Section III.A above, the parties have agreed on the four categories of investments subject to BFO's excuse and exclusion rights (cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets). The dispute is limited to the aggregate cap on excused investments, not the categories themselves.
Excuse Exercise Period. The parties have agreed that BFO's excuse right must be exercised within fifteen (15) business days after BFO's receipt of the applicable investment notice or capital call notice. This is settled.
MFN Commitment Threshold. The $50,000,000 minimum commitment threshold for MFN-eligible limited partners is agreed.
MFN Anchor Investor Threshold. The $200,000,000 dollar threshold for Anchor Investors is agreed. As discussed in Section III.B above, the dispute concerns the scope of the carve-out, not the threshold amount.
MFN Election Period. The 20-business-day MFN Election Period (measured from BFO's receipt of the redacted MFN summary) is agreed.
Enhanced Reporting. The following enhanced reporting provisions are substantially agreed, subject only to minor language edits that C&H expects to resolve in the next round of drafting:
•  Quarterly portfolio-level reports delivered within 45 days of quarter-end;
•  Audited annual financial statements delivered within 90 days of fiscal year-end;
•  Annual ESG reporting covering Fund IV's portfolio companies.
Co-Investment Threshold and Economics. The core co-investment terms are agreed in principle: BFO receives a pro rata co-investment opportunity on deals in which Fund IV's equity investment exceeds $100,000,000, at no management fee and no carried interest, up to BFO's pro rata share. The sole remaining bracketed item is the response period for co-investment notices, as discussed in Section III.D.1 above.
VI. PROCEDURAL REMINDERS
We wish to highlight the following procedural matters for BFO's consideration in connection with the call and the broader Fund IV investment process:
Investment Committee Approval. BFO's investment committee approval is required before BFO can execute the side letter, the subscription agreement, or make any binding capital commitment to Fund IV. Under BFO's internal governance procedures, investment committee approval requires the affirmative vote of at least three (3) of the committee's four (4) members, with Julian R. Hargrove holding individual veto authority. The current negotiation is being conducted without prejudice to investment committee approval, and all terms agreed during the side-letter negotiation (whether on the March 11 call or otherwise) remain subject to ratification by the investment committee at the appropriate time.
No Binding Commitments on the Call. Consistent with the foregoing, BFO's representatives should not make any binding commitments on the call. Agreements reached during the call should be characterized as subject to documentation in a revised draft of the side letter and to investment committee approval. Pamela Cross will manage this framing on the call.
First Close Timeline. Fund IV's anticipated first close is April 30, 2024. The final close deadline under the LPA is October 31, 2024. If BFO intends to participate in the first close — which is BFO's current expectation — the side letter and subscription documents (including the subscription agreement, investor questionnaire, and any required regulatory certifications) would need to be fully negotiated, executed, and delivered well in advance of the April 30 date. Given the typical lead time for document preparation, internal review, and execution logistics, we recommend targeting completion of all documentation no later than approximately April 15, 2024. This underscores the importance of making substantive progress on the remaining open points during the March 11 call.
Post-Call Deliverables. Following the March 11 call, C&H will prepare a conference call summary memorandum documenting the substance of the discussion, any agreements or compromises reached, and any items tabled for further negotiation. If substantive progress is made on the call, C&H will also prepare a revised (third) draft of the side letter reflecting agreed outcomes, for circulation to Ashford Crane. We anticipate that the post-call memorandum can be delivered to BFO within two (2) business days of the call, and that a third draft side letter, if warranted, can be circulated within four (4) to five (5) business days.
VII. REQUESTED ACTIONS FROM BFO PRIOR TO THE CALL
In order to ensure that BFO's representatives and C&H are fully prepared for the March 11 call, we respectfully request that BFO take the following actions prior to the call:
1.  Confirm Attendance. Please confirm the attendance of Sandra M. Whitfield and Derek T. Calloway on the March 11 call. If either Sandra or Derek is unavailable, please advise C&H promptly so that we can coordinate with Ashford Crane regarding rescheduling or alternative representation.
2.  Confirm Fallback Authorization. Please confirm that BFO authorizes C&H and BFO's representatives to offer the fallback positions described in this memorandum in the course of the March 11 call. We would specifically request confirmation of the following:
(a) Authorization to accept a 20% aggregate excuse cap with an ERISA carve-out, or a 20% aggregate excuse cap inclusive of all four excuse categories, as BFO's floor position on the excuse cap;
(b) Authorization to accept a 60-day key person suspension period as BFO's floor position (with a target of 90 days with a constructive cure provision);
(c) Authority to concede on Priority 4 items (co-investment response period, K-1 delivery timeline, MFN summary delivery timing, and placement fee offset application) as described in this memorandum; and
(d) Authority to signal flexibility on the MFN Anchor Investor carve-out scope as part of a package resolution, if the GP demonstrates meaningful movement on the excuse cap and key person suspension.
3.  Additional Points from Investment Committee Members. If Julian R. Hargrove, Renata Vasquez, or any other member of BFO's investment committee has additional points, concerns, or instructions that they wish to communicate in advance of the call, please relay those to C&H by close of business on Sunday, March 10, 2024, so that we can incorporate them into our preparation and talking points.
4.  Contact Information. Please direct all communications regarding this memorandum and the March 11 call to:
Theresa Kim Senior Associate, Funds & Asset Management Calderwood & Harkness LLP 425 Lexington Avenue New York, New York 10017
Direct telephone and email to be provided separately under confidential cover.
VIII. APPENDICES
The following appendices are attached to this memorandum and should be reviewed by BFO's representatives in advance of the March 11 call:
Appendix A: Side-by-Side Comparison Chart — BFO Position vs. GP Position on All Open/Bracketed Points. This chart, prepared by Owen Fischer (associate, C&H), presents each disputed provision in columnar format, with BFO's position, the GP's position, the current status (agreed, bracketed, or tabled), and C&H's recommended resolution. The chart is designed to serve as a quick-reference document during the call.
Appendix B: Excerpt from the Second Draft Side Letter (March 7, 2024) — Bracketed Provisions Highlighted. This excerpt reproduces the text of each provision that remains in brackets in the current draft, with highlighting to identify the specific language in dispute. References to the corresponding discussion in this memorandum are included in marginal annotations.
Appendix C: Relevant LPA Provisions. This appendix contains excerpts from the Fund IV LPA dated December 20, 2023 (governed by the laws of the State of Delaware), including the following provisions cross-referenced in the side letter and in this memorandum:
•  Section 9.4 (Key Person Provisions)
•  Section 8.2 (Excuse and Exclusion Rights)
•  Section 12.1 (Transfer Restrictions)
•  Section 4.3 (Management Fee)
•  Section 5.1 (Capital Calls and Drawdown Mechanics)
•  Section 13.5 (Confidentiality)
This memorandum is intended solely for the use of the named recipients in connection with the representation of Briarwood Family Office LLC by Calderwood & Harkness LLP. It constitutes attorney work product and is protected by the attorney-client privilege. This memorandum should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. If you have received this memorandum in error, please notify the sender immediately and destroy all copies.
— End of Memorandum —
Party | Representative | Role
Calderwood & Harkness LLP | Pamela Cross | Partner, Funds & Asset Management
Calderwood & Harkness LLP | Theresa Kim | Senior Associate, Funds & Asset Management
Briarwood Family Office LLC | Sandra M. Whitfield | General Counsel
Briarwood Family Office LLC | Derek T. Calloway | Director of External Investments
Ashford Crane & Hewitt LLP | Harrison K. Drummond | Partner
Ashford Crane & Hewitt LLP | Elaine C. Woodbury | Senior Associate
Meridian Peak Capital Advisors LLC | Gavin R. Lockhart | Partner, Head of Investor Relations
Meridian Peak Capital Advisors LLC | Tamara Fujimoto | General Counsel & Chief Compliance Officer

CALDERWOOD & HARKNESS LLP Funds & Asset Management 425 Lexington Avenue New York, New York 10017

MEMORANDUM

MATTER NO.: 1026-00001

I. PURPOSE AND OVERVIEW

II. CALL LOGISTICS

IV. NEGOTIATION STRATEGY AND PRIORITIZATION

V. ITEMS ALREADY RESOLVED / NOT IN DISPUTE

VI. PROCEDURAL REMINDERS

VII. REQUESTED ACTIONS FROM BFO PRIOR TO THE CALL

VIII. APPENDICES

Record

Parties

Dates

Amounts